Blessings for the Blessed: Grants for Religious Institutions Revealed

Questions regarding the legality of religious institutions accepting grants from the private sector has rarely come up since there are no real legal restrictions and provisions that forbid such grants. Though there are no restrictions it would still be wise for certain grant making foundations to know some facts.

Religious entities and institutions have greatly influenced the community and their families and religion and belief has molded the development of these individuals, this much is a known fact by foundations and charities. Grant makers provide assistance to these institutions in support to the endeavor these groups undertake in service to the community and its citizens.

Though others grant makers readily provide grants to different belief system, others chose to turn way from providing such grants in fear of legalities or providing the wrong notion that they are promoting a certain belief system. Some are not aware that grants to these religious situations may also include certain stipulations as any other form of grants. It is possible to provide these grants without actually endorsing the belief system only the project.

In order to provide information to institutions and foundation in making grants, the Council on foundations released two reference materials namely, Legal Considerations Affecting Public and Private Grantmaking to Religious Organizations and other Q & A materials that would provide more insight on these matters.

With the support of the Ford Foundation and penned by the Caplin and & Drysdale law offices, these information has provided much light to the issues.

In the resource materials, questions of grants given to different types of religious churches have been addressed. As mentioned earlier there are no prohibitions on grantmakers to provide grants to religious institutions and the like. The prohibition of government interference in religious affairs as stated in the First Amendment does not apply to the private sector.

Grant makers are allowed to support or provide grants based on their own choices. It is basically a question of choice rather than legality. Some grantmaking bodies are prohibited from supporting belief systems by their titles of incorporation and thus may be choose carefully the type of programs they wish to sponsor.

Questions on identifying which religious institution is a public charity or not, has also been answered by these publications as well. A lot of churches are not legally required to file income tax exemptions.

Most have a group exemptions ruling granted by their denomination and if such determination letters do not exist it will be the sole responsibility of the grantmaker to determine if the group is a church. Based on the IRS Tax Code there is no clear-cut definition of what a church is, but certain attributes have been developed common to churches.

In the event that the grantmaker has decided that a potential candidate is a church, they may opt to provide the said grants. Now the grant makers will still be the deciding factor whether to provide the grant and they will have the option of setting the criteria or eligibility of candidates in being awarded the grant.

Some organizations will require documentation and annual incomes from religious organization that they are considering as potential grantees. Other stipulations may also be added by the grantmaker, as they deem necessary in selecting the beneficiaries of the grant.